EU powers at IAEA urge Iran to take atom 'timeout'

VIENNA, Mar 7 (Reuters) European powers urged Iran today to embrace a UN idea of a ''timeout'' from nuclear activity, saying sanctions they sponsored against Tehran would be simultaneously suspended.

The appeal, coupled with condemnation of Iran's effort to speed up uranium enrichment, came at a meeting of the International Atomic Energy Agency's board of governors whose keynote topic was Tehran's nuclear defiance.

Members of the 35-nation board were expected shortly to ratify sharp cuts in IAEA technical aid to Iran due to concerns Tehran may be trying to make nuclear bombs behind the facade of a civilian atomic energy programme.

Tehran says its nuclear programme, anchored on uranium enrichment that can yield fuel for power plants or, if taken to higher degrees, bombs, is meant only to generate electricity.

But four years of IAEA investigations have failed to verify Iran's intentions are entirely peaceful.

In a statement to the board, France, Germany and Britain, ''EU3'' co-sponsors of initial U.N. sanctions slapped on Iran in December, deplored Iran's efforts to boost research-level enrichment into ''industrial scale'' production of nuclear fuel.

They condemned Iran's refusal to let the IAEA set up remote monitoring cameras in its plant at Natanz and its ban, in reprisal for sanctions, on 38 agency inspectors from Western states and refusal to accept 10 replacement candidates.

''Iran is contesting routine measures like electronic surveillance. (All this) provokes grave concerns ... Iran has chosen to do precisely the opposite of cooperation and transparency,'' said the EU3 statement.

But it said Western leaders remained fully committed to seeking a negotiated solution. ''This is why we appeal insistently to Iran to seize the offer of a double suspension floated by the IAEA director.'' MUTUAL ''TIMEOUT'' PROPOSAL IAEA chief Mohamed ElBaradei proposed in January that Iran and the UN Security Council simultaneously suspend enrichment related activity and sanctions respectively to break a deadlock over conditions for reviving negotiations over the crisis.

But Iran again refused to mothball its nuclear programme as a precondition for talks on big trade and technology benefits offered by six world powers last June. Tehran is loath to cede its main bargaining chip before talks begin, diplomats say.

The United States, EU3, Russia and China are now negotiating to widen UN sanctions over Iran's disregard of a February 21 UN deadline to stop enriching uranium.

''We will not stand still in the face of intimidation and threats and will never give up our inalienable right to peaceful use of nuclear energy,'' Ali Asghar Soltanieh, Iran's ambassador to the IAEA, told the closed board gathering.

Diplomats said the United States shared the EU position but kept a low profile, avoiding the sharp political attacks it has made on Iran at previous board meetings so as not to upset Tehran in talks on stabilising Iraq.

The IAEA board was expected to ratify a slash in technical aid to Iran made by the agency's professional Secretariat last month to uphold a December U.N. ban on sensitive nuclear trade that Iran could use to produce nuclear fuel.

The Secretariat froze or curbed 22 of the 55 aid projects. Those exempted deal primarily with radio-pharmaceuticals and isotopes for medical care and agriculture.

Board members also hailed North Korea's February 13 agreement, in exchange for emergency fuel aid and other benefits, to freeze its nuclear arms programme by mid-April and readmit IAEA non-proliferation inspectors thrown out four years ago.

IAEA director Mohamed ElBaradei goes to Pyongyang on March 13 to iron out details of the new mission.

REUTERS SP KN2308